Moleculin Biotech, Inc.

MBRX Details

Moleculin Biotech, Inc. (NASDAQ: MBRX) is an early-stage pharmaceutical company that develops therapeutic candidates to treat highly resistant cancer cells and viruses. The company's three key technologies are 1) Annamycin, which is used to treat relapsed or refractory Acute Myeloid Leukemia (AML); 2) WP1066, which is used to treat ependymoma; and 3) WP1122, for treating COVID-19. Three of the company's six therapeutic candidates have shown human activity in clinical trials, representing all three key technologies.

Approval to Extend Doses in Clinical Trials of Annamycin: MBRX stated on July 13, 2021, that it had gained clearance from the Polish Bioethics Committee and authorization from the Polish Department of Registration of Medicinal Products (URPL) to increase the dose-limiting toxicity (DTL) criteria for future recruited patients in its Annamycin phase 1/2 clinical studies. As a result, MBRX plans to release topline data from its current Phase 1/2 trial for the treatment of AML in H2FY22.

H1FY21 Results: The company has not generated any revenues to date. During H1FY21 (ended June 30, 2021), its R&D expenses rose 9.33% YoY to USD 7.15 million from USD 6.54 million during H1FY20. In addition, MBRX reported a decline in net losses to USD 8.69 million during H1FY21 vs. USD 11.32 million during H1FY20. As of June 30, 2021, the company had cash and cash equivalents of USD 79.51 million with no outstanding debt.

Product Pipeline (Source: Company’s website)

Key Risks: The success of Annamycin, WP1066, and WP1122 is critical to MBRX's future. The firm has invested significant resources in clinical trials and developments, and if they don't get regulatory permission in the future, the company's operations and cash flows will be affected. Furthermore, the active pharmaceutical ingredients (APIs) employed in MBRX's product candidates are supplied mainly by third parties. As a result, any delay in obtaining the required quantity or quality might cause operational disruptions and hurt the company's overall performance.

Outlook: MBRX announced in its Q2FY21 press release that it intends to publish cohort topline findings from the current Phase 1/2 trial for the treatment of AML and the study's topline results in H2FY21. In addition, it stated that the Phase 1/2 research in Europe for assessing the combined therapy of Annamycin + AraC for the treatment of AML and the second Phase 1b/2 (also in Europe) of Annamycin in sarcoma lung metastases would begin in H2FY21.

MBRX Daily Technical Chart (Source: REFINITIV)

Stock Recommendation: MBRX stock declined 39.30% in the past twelve months and is currently leaning towards the lower-band of the 52-week range of USD 2.70 to USD 8.78. The stock is currently trading below its 50 and 200 DMA levels, and its RSI Index is at 43.44. Considering the correction in the stock price, the road to regulatory approvals, and associated risks, we recommend a "Speculative Buy" rating on the stock at the current price of USD 2.95, traded flat as of September 17, 2021, at 1:14 PM ET.

* The reference data in this report has been partly sourced from REFINITIV.

* All forecasted figures and industry information have been taken from REFINITIV.

* Depending upon the risk tolerance, investors may consider unwinding their positions in a respective stock once the estimated target price is reached.

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